Today's US April CPI release is unlikely to weigh on the dollar unless the monthly figures, with core inflation expected at a still high 0.4%, surprise to the downside. Therefore, the US Dollar Index (DXY) is set to trade in a 103.20-104.00 range, economists at ING report.

Barring a very soft CPI figure, there is no reason for a sharp dollar sell-off

“Headline year-on-year inflation may well be past its peak, helped by base effects and used car prices, yet the focus will still be on the core month-on-month figures. A still high 0.4% MoM core inflation increase is expected today. Unless that surprises at something like 0.2% MoM, we would expect the dollar to stay largely bid – or consolidate near the highs.”

“DXY could trade in a 103.20-104.00 range and barring a very soft CPI figure we see no reason for a sharp dollar sell-off.”

See – US CPI Preview: Forecasts from 12 major banks, the first decelerating print in a long time